The deal, which was confirmed this afternoon, marks the latest step in MFI's retreat from retail after it agreed the sale last month of its troubled retail arm to Merchant Equity Partners for£1.
Sofa Workshop has 30 stores and achieved sales of£27 million in 2005. It is an upper-middle market business specialising in upholstered and leather sofas. Founded in 1985, the business was bought by MFI in 2002.
The move is a big step for New Heights founders Gareth Williams, Toby Ash and Richard Hepworth. Founded in 1999, New Heights has 16 stores which specialise in wood furniture. It plans to run the Sofa Workshop brand side by side with New Heights, but intends to locate the two brands side by side in larger units. The combined business will have sales of close to£40 million this year.
'The Sofa Workshop business has come home,' said Ash. 'It's back to being a stand-alone brand specialist brand with an entrepreneurial spirit an quality ethos.'